United States Court of Appeals

For the First Circuit

Nos. 13-2462
14-1127
UNITED STATES,
Appellee,
v.
KARAPET DZHANIKYAN AND RONALD J. MARTINEZ,
Defendants, Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]

Before
Barron, Selya, and Lipez,
Circuit Judges.

Amy M. Belger for appellant Dzhanikyan.

Derege B. Demissie, with whom Demissie and Church was on
brief, for appellant Martinez.
Kelly Begg Lawrence, Assistant United States Attorney, with
whom Carmen M. Ortiz, United States Attorney, was on brief, for
appellee.

December 11, 2015

BARRON, Circuit Judge.

In these consolidated criminal

appeals, Karapet Dzhanikyan and Ronald Martinez raise a number of

challenges to their convictions, including some that concern the
District Court's decision to try the two men together.

For the

reasons set forth below, we affirm each of the convictions except

for Martinez's conviction for conspiring to use extortionate means
to collect an extension of credit in violation of 18 U.S.C.
894(a).
I.
The initial indictment charging Dzhanikyan and Martinez
was handed down in 2011 and arose out of a year-long wiretap
investigation

of

Madarati.

superseding

suspected

drug

indictment,

trafficker
containing

named
eleven

Safwan
total

counts and naming fifteen defendants, was handed down in 2012.

Five

counts

Dzhanikyan or Martinez.

of

the

superseding

indictment

named

Dzhanikyan was charged with one count of

conspiring with Madarati and others to distribute oxycodone, in

violation of 21 U.S.C. 846 (Count 1).

Martinez was charged with

two counts of conspiring with Madarati and others to attempt to

collect a debt through extortionate means, in violation of 18
U.S.C. 894(a) (Counts 2 and 3), and two counts of possessing
crack cocaine with intent to distribute it, in violation of 21
U.S.C. 841(a)(1) (Counts 10 and 11).

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Before trial, Martinez moved to be tried separately from

all of his co-defendants, including Dzhanikyan.

Martinez also

moved to be tried separately on each of the four counts he faced.

In January of 2013, the District Court denied Martinez's motions
for severance.

Dzhanikyan made no pre-trial severance motion.

By the time the trial began on June 3, 2013, all of the

co-defendants of Dzhanikyan and Martinez had pleaded guilty.
trial

thus

proceeded

with

only

Dzhanikyan

and

Martinez

The
as

defendants.
After

the

presentation

of

the

evidence

at

trial,

Martinez moved under Federal Rule of Criminal Procedure 29(a) for

acquittal on all the counts for which he had been charged.

The

District Court granted Martinez's motion as to the first of the

two counts that had charged him with using extortionate means to
collect an extension of credit (Count 2).

That extortion count

charged Martinez with conspiring to use extortionate means to

collect an extension of credit by Madarati to a jewelry store
owner.

The alleged extortionate means involved shooting the

store's windows and resulted in injuries to several people.

The District Court denied Martinez's motion as to the
remaining counts against him, including as to the second extortion
count (Count 3).

That extortion count charged Martinez with

conspiring

extortionate

to

use

extension of credit by Madarati.

means

to

collect

separate

The alleged extortionate means

- 3 -

involved an attempted break-in of the house of the purported

debtor.
Following the District Court's ruling on the Rule 29(a)
motion,

jury

deliberations

began.

In

the

midst

of

the

deliberations, the jury submitted two questions to the District

Court.

One of those questions is at issue in these appeals: "Can

we use all the evidence presented during the trial as we evaluate

each individual charge?"

The District Court proposed to answer

that question by saying simply, "Yes."

Martinez's counsel raised a concern about the proposed
answer.

She requested that the District Court make clear that the

jury could not rely on evidence from Martinez's by-then dismissed,

jewelry-store

extortion

count

in

considering

remaining extortion count against Martinez.

(at

least)

the

Martinez's counsel

did not actually propose such an instruction, however.

Martinez's

counsel explained that she would need some time to come up with
the right wording.

The District Court made clear that in its view

there was no need for any limiting instruction.

Dzhanikyan raised

no objection to the District Court's proposed answer to the jury's

question.
The District Court called the jurors back into the
courtroom and told them that the answer to their question was,
"Yes."

After addressing the jury's other question, the District

Court asked the jury: "And you understand the use of all of the

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evidence with respect to each charge as it applies to that charge?"

The jury responded by "nodding."
The jury returned guilty verdicts against Dzhanikyan and
Martinez on all four remaining counts.

Following the verdicts,

the defendants moved for both a judgment of acquittal under Federal

Rule of Criminal Procedure 29(a) and a new trial under Federal
Rule of Criminal Procedure 33.1

The motion for a new trial

contended that the District Court's "Yes" response to the jury's

question resulted in "evidentiary spillover," a "variance," and
"retroactive

misjoinder."

The

District

Court

denied

the

defendants' Rule 29(a) motions and their joint motion for a new
trial.
In considering the defendants' challenges on appeal, we
start with their individual challenges to the District Court's
initial decision to try them together and to the District Court's
denial of their joint motion for new trial.

We then consider

Martinez's separate challenges to his extortion conviction on

Count 3.
II.
"[A] trial judge has 'considerable latitude' in deciding
severance questions," and thus, even when a challenge to a decision
to try a defendant jointly has been properly preserved, "the

Technically, Martinez filed a motion for a new trial and

then Dzhanikyan moved to join that motion.

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judge's resolution of [those questions] 'will be overturned only

if that wide discretion is plainly abused.'"

United States v.

O'Bryant, 998 F.2d 21, 25 (1st Cir. 1993) (quoting United States
v. Natanel, 938 F.2d 302, 308 (1st Cir. 1991)).

An abuse of

discretion in declining to sever a trial may be found, however, if

a defendant "who seeks a separate trial can . . . mak[e] a strong
showing of evident prejudice."

Id.

And that strong showing may

be made "if there is a serious risk that a joint trial would . . .

prevent the jury from making a reliable judgment about guilt or
innocence."

Id. (quoting Zafiro v. United States, 506 U.S. 534,

539 (1993)).

With that background in place, we now turn to the

challenges the defendants bring -- both individually and jointly -to the decision to try them together.
A.
Dzhanikyan contends that there was a serious risk here
that, in consequence of the joint trial, the jury would not be
able

to

render

reliable

verdict

because

the

evidence

the

government intended to put forth about Martinez's involvement in

the two alleged extortion schemes was "highly inflammatory and
prejudicial."2

Dzhanikyan did not raise this challenge below,

The evidence concerning Count 2 included testimony that a

man the government maintained was Martinez shot bullets through
the windows and display cases of a jewelry shop, injuring several
bystander employees of the shop. The evidence concerning Count 3
included testimony that a man the government named as Martinez

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however, and so his challenge, if not waived, is subject to review

only for plain error.

See United States v. Magana, 127 F.3d 1, 7

(1st Cir. 1997) (reviewing unpreserved misjoinder claim for plain

error).3
To

satisfy

the

demanding

plain-error

standard,

Dzhanikyan must show that "(1) an error occurred, (2) the error
was obvious, (3) the error affected substantial rights, and (4)
the error seriously impaired the fairness, integrity, or public
reputation of judicial proceedings."

United States v. Lanza-

Vzquez, 799 F.3d 134, 145 (1st Cir. 2015) (citation and internal
quotation marks omitted).

But he cannot make that showing.

It is not obvious that the government's evidence about

Martinez's use of extortionate means to collect an extension of
credit would create a serious risk that the jury would be prevented
from

making

reliable

judgment

about

Dzhanikyan's

role

in

committing the distinct and unrelated drug conspiracy crime for

which he was charged.

That evidence, to be sure, did involve

attempted to break into the home of a purported debtor in the

middle of the night.
3

The government argues in its brief that this argument has

actually been waived because Dzhanikyan made no timely motion for
severance under Federal Rule of Criminal Procedure 12(b)(3). See
United States v. Oquendo-Rivas, 750 F.3d 12, 17 (1st Cir. 2014)
(finding waiver in the context of another untimely 12(b)(3)
motion). But we need not decide here when a failure to file a
pre-trial motion to sever might constitute a waiver, because
Dzhanikyan's challenge fails even if we apply the plain-error
standard.

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descriptions of very violent activity.

But given the minimal risk

that the jury would believe that the evidence against Martinez
pertaining to extortion was relevant to the government's case
against

Dzhanikyan

for

drug

distribution,

we

conclude

that

Dzhanikyan has not shown that the District Court plainly erred in
exercising

its

broad

discretion

to

decide

Dzhanikyan's trial from that of Martinez.

whether

to

sever

See United States v. De

La Paz-Rentas, 613 F.3d 18, 23 (1st Cir. 2010) (rejecting a

defendant's

severance

challenge

where

the

trial

included

"substantial" evidence of his co-defendants' gun dealings -- with

which the defendant had no involvement -- but where "there was no
reason for the jury to be confused about [the defendant's] role").
B.
Before trial, Martinez offered a different reason for
contending that the District Court should try the two defendants
separately.

Martinez contended that the decision to try the two

of them together risked prejudicing the jury's ability to make a

reliable judgment about whether Martinez intended to distribute
the crack cocaine that he was charged with possessing.
On appeal, the government contends that Martinez has
failed to renew this challenge to us and that this challenge has
therefore been waived.
on

that

score,

But even assuming the government is wrong

Martinez's

challenge

to

the

District

Court's

decision not to sever his trial from Dzhankiyan's still fails.

- 8 -

Martinez bases his severance argument on the evidence

that the government was to put forth concerning Dzhanikyan's
alleged

involvement

conspiracy.

in

Madarati's

alleged

drug-distribution

That evidence concerned Dzhanikyan's alleged travel

to California to make substantial purchases of oxycodone pills on

behalf of Madarati. Martinez contends that this evidence regarding
his co-defendant's alleged involvement in drug distribution would
prejudice the jury's evaluation of whether Martinez possessed the
requisite intent to distribute the drugs that he was charged with
possessing.
Martinez points out that other evidence supported his
contention that he possessed the drugs for personal use.

And he

points in that regard to the trial testimony of an expert witness

that the amount of crack cocaine with which Martinez was charged
with possessing -- 3.25 grams of crack cocaine -- was consistent
with possession for personal use rather than with possession with
an intent to distribute.
But Martinez does not contend on appeal that his trial
on the extortion counts should have been severed from his trial on
the crack cocaine possession count.

And thus Martinez necessarily

concedes that even if his trial had been severed from Dzhanikyan's,
the jury still would have been exposed to evidence about Madarati's
drug distribution conspiracy.

After all, to show that Martinez

conspired to use extortionate means to collect an extension of

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credit, as Count 3 alleged, the government needed to put forward

evidence

that

there

was

an

"extension

of

credit."

And

the

government's case in that regard consisted, in significant part,

of evidence that a man named Victor Loukas had traveled more times
to California on behalf of Madarati than had Dzhanikyan, and as
part of Madarati's drug-distribution conspiracy, to buy more total
oxycodone pills for more money than had Dzhanikyan.
In consequence, any severance challenge Martinez makes
on appeal necessarily amounts only to a complaint about the
incremental additional risk of prejudice that would arise from the
jury hearing more about a topic about which the jury would already
have heard much.

We thus do not see how Martinez can successfully

contend that the jury's exposure to the additional evidence about

drug distribution that pertained to Dzhanikyan created the kind of
"serious" risk of prejudice that could suffice to show that the
District Court abused its discretion in deciding to try Martinez
and Dzhanikyan together.

See O'Bryant, 998 F.2d at 25, 27.

We

thus reject Martinez's challenge to the District Court's initial

decision to decline to sever his trial from that of his codefendant.
C.
Looking past the District Court's initial decision not
to sever the trials of Martinez and Dzhanikyan, the defendants
contend -- as they did in their joint motion for new trial -- that

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they were impermissibly prejudiced once the trial began by the

"yes" answer that the District Court gave to the jury's question
about which evidence the jury could use.

Specifically, the

defendants renew their contention that the District Court's answer

to the jury's question caused "evidentiary spillover," resulting
in a "variance," in which the crimes charged against them varied
from the crimes for which they were ultimately convicted, see
United States v. Dellosantos, 649 F.3d 109, 116 (1st Cir. 2011),
or a "retroactive misjoinder," in which trying the defendants
together was rendered improper by developments at trial, see United
States v. Mubayyid, 658 F.3d 35, 72 n.39 (1st Cir. 2011).
But

the

defendants'

contention

does

not

hold

up.

"[I]nstructions must be evaluated not in isolation but in the

context of the entire charge."
373, 391 (1999).

Jones v. United States, 527 U.S.

And once the District Court's answer to the jury

is considered in this way, it becomes clear that the District

Court's answer to the jury's question did not give rise to the
concern about the claimed "evidentiary spillover" on which the
defendants' variance and retroactive misjoinder challenges depend.
In
instructed

its

the

main

jury

charge,

that

the

the

District

defendants

Court

were

expressly

"charged

with

different crimes" and that the jury had a duty to "consider the
evidence separately as to each defendant and as to each count which
a defendant is charged."

The District Court then explained each

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count as it related to each defendant and instructed the jury what

it would need to find to convict each defendant on each count.4
And, finally, the District Court sought to confirm the jury's
proper understanding of the instructions as a whole.

The District

Court did so by saying, after offering its "yes" answer to the

On Dzhanikyan's conspiracy charge, the District Court

explained as follows: "Let me turn now to Count 1, which is the
specific conspiracy to distribute OxyCodone, and only Mr.
Dzhanikyan is charged in that. . . . So, review the evidence, what
was Mr. Dzhanikyan's conduct in connection with the purchase and
sale of any pills, what conversations did he have with Mr. Madarati
or others, what did he know about any agreement among Madarati and
others to distribute drugs, and then determine whether there was
an agreement to distribute OxyCodone as charged, and then whether
the government has proven that Mr. Dzhanikyan did knowingly and
intentionally join in the conspiracy."
On
Martinez's
conspiracy-to-extort
charge,
the
court
explained: "The next count is Count 3, which pertains to only Mr.
Martinez. . . . Again, review the evidence, consider evidence of
Mr. Madarati's and Kabba's conversations. What, if anything, did
Mr. Martinez do or attempt to do?
What, if any, financial
arrangements existed between Mr. Loukas and Madarati?
In
particular, had Madarati made a loan to Loukas or agreed to defer
repayment of an existing debt? That is, was there a loan or an
extension of credit to Loukas by Madarati or any co-conspirator?
If there was not, then the defendant cannot be found guilty."
And on Martinez's charges of possession with intent to
distribute, the court explained: "You need to look at all the
evidence and decide whether he intended to sell it or give it away
or transfer it to somebody else or whether he had this cocaine
only for his personal use. . . . You may take into account how
much cocaine he had, and you must certainly look at his state of
mind about this, because intent to distribute, again, involves the
defendant's state of mind. So, you need to infer that from his
words,
his
conduct,
and
all
of
the
surrounding
circumstances . . . ."
Finally, the court concluded the charge by reiterating: "And,
again, the government has to prove each and every element of each
offense and only if the government proves each element of each
offense, can you find the defendant guilty."
- 12 -

jury's question about what evidence could be "used": "And you

understand the use of all of the evidence with respect to each
charge as it applies to that charge?"
Thus, considered in the context of the instructions as
a whole, the District Court's one-word affirmative answer to the
jury's question did not effectively instruct the jury that it could
use evidence of one crime to make a judgment of guilt about a
separate

crime

to

which

that

evidence

had

no

relation.

Accordingly, the defendants' challenge to the District Court's

denial of the motion for a new trial must fail.
III.
We now turn to Martinez's separate challenges to his
conviction on Count 3.

In that count, the government charged

Martinez with violating 18 U.S.C. 894(a) by conspiring with

Madarati and another man (named Kabba) to use extortionate means
to attempt to collect an "extension of credit" that had been made
by Madarati.
A.
Martinez

raised

his

sufficiency-of-the-evidence

challenge in his motion for acquittal, and so we review the record

de novo.

See United States v. Munyenyezi, 781 F.3d 532, 536 (1st

Cir. 2015).

In doing so, we view the evidence and all reasonable

inferences that can be drawn from it in the light most favorable

to the verdict.

Id.

We may reverse the conviction only if on the

- 13 -

basis of this evidence "no rational jury could have" found Martinez
guilty beyond a reasonable doubt.

Id.

Thus, to sustain Martinez's conviction on this count,

the government must show that there was sufficient evidence from
which a rational jury could find not only that Martinez conspired
to use extortionate means, but also that Martinez had used those
means to collect payment for an underlying "extension of credit"
from Madarati.

Martinez contends that there was not sufficient

evidence to support the conviction because the record provides too

little evidence that Madarati had made an "extension of credit."
And we agree with Martinez on this point.5
B.
In evaluating Martinez's challenge, we start with the
text of the criminal statute and how it defines what an "extension
of credit" is.

Under 18 U.S.C. 894(a)(1), it is a crime to

"knowingly participate[] in any way, or conspire[] to do so, in

the use of any extortionate means . . . to collect or attempt to
collect any extension of credit."

The statute then defines "[t]o

extend credit" as "to make or renew any loan, or to enter into any
agreement, tacit or express, whereby the repayment or satisfaction

We thus need not consider Martinez's other ground for

challenging this conviction -- his contention that he was subjected
to a retroactive misjoinder on Counts 2 and 3 after the District
Court granted his motion for acquittal on Count 2, due to the
prejudicial effect of the jury's exposure to the evidence the
government put forth against him on the acquitted count.

- 14 -

of any debt or claim, whether acknowledged or disputed, valid or

invalid, and however arising, may or will be deferred."

Id. 891

(1).
The government charged Martinez with conspiring with
Madarati to use extortionate means (making threats and planting
evidence) to attempt to collect an alleged "extension of credit"
that Madarati had made to Victor Loukas.

Loukas was the man who

took two trips to California to purchase thousands of dollars of

oxycodone pills for Madarati with Madarati's money.
In

giving

Loukas

money

to

buy

pills

for

Madarati,

Madarati was not fronting money to Loukas for his personal use.
Madarati was supplying Loukas with the means to perform a service
for Madarati -- namely, purchasing drugs that Madarati could then
re-sell. Thus, consistent with its presentation to the jury below,
the government does not argue on appeal that, in giving the money
to Loukas to make the purchases, Madarati made a "loan" within the
meaning of 891.

Cf. United States v. Bruce, 405 F.3d 145, 149-

50 (3d Cir. 2005).6

But, as the plain text of 894 reveals, the statute has
a broad reach and clearly bars the use of extortionate means to

In addition to the money that Loukas received from Madarati

to buy the pills for Madarati, Loukas also testified that Madarati
paid him $10,000 for the two solo trips to California that Loukas
made on Madarati's behalf.
The government does not argue that
such a payment for services constituted a loan within the meaning
of 894, and we agree that it did not.

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collect payment for more than traditional "loans."

See United

States v. Hoyle, 237 F.3d 1, 6 (1st Cir. 2001) (citing United

States

v.

Sedlak,

720

F.2d

715,

720

(1st

Cir.

1983)).

In

particular, the statute covers any attempt to use extortionate

means to collect "an extension of credit." And the statute defines
that phrase expansively, so that it encompasses any "agreement,
tacit or express, whereby the repayment or satisfaction of any
debt or claim, whether acknowledged or disputed, valid or invalid,
and however arising, may or will be deferred." 18 U.S.C. 891(1).
The

key

question,

therefore,

is

whether

supplies "sufficient indicia" of such an agreement.

the

record

See Hoyle,

237 F.3d at 7 (finding "sufficient indicia of agreement . . . to

conclude that an agreement to defer payment of the debts existed").
Before delving into what the record shows about whether such an
"agreement" existed here, however, we need to say more about what
is meant by the requirement that there be an "agreement."
In our last case addressing the issue, Hoyle, 237 F.3d
at 6-7, we noted that the Third Circuit has reasoned (in upholding
the sufficiency of an indictment under 894) that "[w]hen a selfstyled

creditor

appears

before

his

'debtor'

and

demands

satisfaction, the creditor posits both a debt and the prior

deferral of its repayment."

United States v. DiPasquale, 740 F.2d

1282, 1287 (3d Cir. 1984); see Hoyle, 237 F.3d at 6.

And the Third

Circuit has cited the rule of DiPasquale in finding sufficient

- 16 -

evidence

of

an

"agreement

to

defer"

payment

--

and

thus

an

"extension of credit" -- to support convictions under 894 on at

least two occasions.

See Bruce, 405 F.3d at 149-50; United States

v. Traitz, 871 F.2d 368, 387-88 (3d Cir. 1989); cf. Hoyle, 237
F.3d at 6 (finding it unnecessary under the circumstances to rely
on DiPasquale to uphold the conviction).
But to the extent DiPasquale suggests that a mere demand
for payment, or even that a demand for payment that is not
immediately followed by the use of extortionate means, suffices to
show that there has been an agreement to defer payment and thus an
"extension of credit," we disagree.

By its plain terms, the

statute distinguishes a mere debt from an "extension of credit" on

the basis of whether there has been an agreement to defer payment.
See United States v. Boulahanis, 677 F.2d 586, 590 (7th Cir. 1982)
("Section 894 does not make it a crime to use extortion to collect
debts,

but

only

to

exact

repayment

of

credit

previously

extended.").
Thus, when there is not a loan, we hold -- consistent
with the decisions of a number of our sister circuits -- that the
government must prove that the creditor manifested an assent (even
if only unilaterally and even if only tacitly) to defer payment.
See United States v. Wallace, 59 F.3d 333, 339-40 (2d Cir. 1995);
United

States

v.

Stokes,

944

F.2d

211,

215

(5th

Cir.

1991)

("[P]roof of some manifestation by the creditor of his assent to

- 17 -

defer,

however

Boulahanis,

677

minimal,
F.2d

at

burdens
590

the

("The

government's

extension

of

case.");

credit

is

deliberate act by a creditor.").7

Only then is there sufficient

evidence

of

an

"agreement

whereby

the

repayment

or

satisfaction of any debt or claim . . . may or will be deferred."

18 U.S.C. 891(1).
Accordingly,

in

reviewing

the

record

here,

we

are

looking not merely for evidence of a demand for immediate payment.

We are looking for what we found in Hoyle: "sufficient indicia of
agreement . . . to conclude that an agreement to defer payment of
the debt [] existed."

See Hoyle, 237 F.3d at 7.

Absent such

evidence, the conviction must be reversed.

The question of exactly what constitutes evidence of an
"agreement" for legal purposes is often not susceptible to a rulelike answer.

Rather, one must consider the facts in light of the

context. And this is true for the "agreement" referenced in 891.

The same actions or communications may carry different
implications depending on that context.

In some circumstances,

We recognize that in Hoyle, we expressly "decline[d] to give

[] much weight" to Boulahanis, Stokes, and Wallace, in part because
we thought they "require[d] more than [wa]s required in our
decision in Sedlak." Hoyle, 237 F.3d at 6. On further review,
however, we do not see a meaningful conflict between those cases
and Sedlak, at least with respect to the kind of evidence that
suffices to show an "agreement to defer." In fact, Sedlak did not
address that issue at all, because it found a loan, not an
agreement to defer. See Sedlak, 720 F.2d at 720-21.

- 18 -

for example, a creditor's silence might fairly be characterized as

a tacit agreement to defer payment -- such as where the creditor
faces his debtor and stays silent rather than making or implying
a demand for immediate payment.

See Hoyle, 237 F.3d at 6-7.

But

in others, the creditor's silence may indicate only an intent not

to

alter

whatever

message

communicated to the debtor.

the

creditor

had

most

recently

And where that message was a demand

for immediate payment, silence may indicate only that the prior
demand has not been withdrawn.
Thus, as the relevant precedents amply demonstrate,
determining whether the record in a given case includes "sufficient
indicia of agreement" to support the inference that a creditor
agreed to defer payment will often require a particularized review
of both the creditor's conduct and the surrounding context.

Here,

our review of the record leads us to the conclusion that Madarati

never agreed -- tacitly or expressly -- to defer Loukas's payment.
C.
The government's brief is less than clear in identifying
the evidence in the record that suffices to show that Madarati
agreed to defer the payment of what Loukas owed.

But at oral

argument, the government explained that it "doesn't contend that

the deferral occurred at the time Loukas took off to California
with the money."

The government contended instead that the

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agreement to defer "repayment or satisfaction" occurred later,

when Loukas returned from California.
At that point, the government contends, Loukas did owe
Madarati either the pills that Loukas was to buy with Madarati's
money or the money itself.

And, in the government's view, when

Madarati made contact with Loukas following his return to Boston

but then waited more than a week before undertaking extortionate
means to collect payment, Madarati tacitly agreed to defer payment
by Loukas.8
In pressing this contention, the government identifies
certain specific actions that Madarati took (or, in some cases,
failed to take) that allegedly show that he was tacitly agreeing
to give Loukas more time to pay.

But, we conclude, the record

does not supply sufficient evidence of such a tacit agreement on

Madarati's part.

In his opening brief, Martinez argued that there was no

"debt" at all, because Loukas was merely Madarati's agent. But
Martinez does not explain why a jury could not reasonably find
that Loukas became Madarati's debtor, at the latest, upon Loukas's
return from California when he failed to provide Madarati with
either the pills or the money, and we see no basis for concluding
that a jury could not so find. See United States v. Bonanno, 467
F.2d 14, 15-17 (9th Cir. 1972) (finding a debt on similar facts).
Martinez also argues that Loukas's decision to steal Madarati's
money "did not create an extension of credit," because it was
"simply a theft." But the key issue is whether Madarati agreed to
give Martinez more time to pay, and the reason for Loukas's
default -- namely, whether he stole the pills -- has no bearing on
that issue.

- 20 -

To see why, it first helps to describe what the record

shows about what had transpired before Madarati met with Loukas
when Loukas came back to Boston from his trip to California.
Loukas testified that on March 29, 2011, as he was on his way to
the airport in Los Angeles at the end of his second solo trip to
California on Madarati's behalf, he called Madarati. In that call,
Loukas testified, he told Madarati that the police had pulled
Loukas over while Loukas was heading to the airport and confiscated
all the pills that Loukas had just purchased with Madarati's money.
In truth, however, according to Loukas's testimony,
Loukas had purchased the pills for Madarati as requested but then
given the pills to a friend who sold the pills on his own and split
the profit with Loukas.

In other words, Loukas testified, the

police had not confiscated the pills.

Instead, Loukas stole the

pills from Madarati and then came up with a cover story to tell
Madarati in order to hide his theft.
There is no evidence in the record about how Madarati
responded to Loukas's false story when he first heard it. But
Loukas conceded in his testimony that the story he told Madarati
was an "outrageous" one that no one would likely believe.

And

thus it is not surprising that the record shows that when Loukas
arrived in Boston, he "basically disappeared for a day," such that
Madarati "had no idea where I was."

- 21 -

In light of what the record shows regarding these events,

a rational jury could not find that Madarati assented -- even
tacitly -- to give Loukas more time to provide the pills or the
money as of the first day after Loukas had returned to Boston.
The record shows only that, as of that time, Loukas had told
Madarati an "outrageous" lie to explain why he did not have the
pills or the money and that Loukas then effectively hid from
Madarati upon returning to Boston.
Nor does the record provide sufficient evidence from
which a jury could reasonably find that Madarati assented to the
deferral of Loukas's payment thereafter.

To explain why we reach

this conclusion, we begin with what the record shows about the
first contact that Loukas made with Madarati after Loukas came
back to Boston.
Loukas testified that "about a day" after he got back
from Los Angeles, Loukas turned his phone back on, called Madarati,
and "told him to meet me at my home."

According to the testimony

given by Loukas, he and Madarati talked for about an hour when

they met on March 30.

At that meeting, according to Loukas's

testimony, Loukas repeated the same false story that he had relayed
to

Madarati

over

the

phone

from

California.

Then,

Loukas

testified, at Madarati's suggestion the two men left Loukas's house

in Madarati's wife's car and drove to a convenience store.

- 22 -

Loukas testified that during that ride, Madarati made no

threats to Loukas and that "[a]t that moment I thought he was
buying the story."
quickly

changed

But, Loukas's testimony reveals, Madarati

his

convenience store.

tone

once

the

two

men

arrived

at

the

Loukas testified that when the two men got to

the parking lot of the convenience store, "[Madarati] proceeded to

let me know that he hoped it wasn't me [who took the pills] because
he would take care of the problem like he did at the jewelry
store," referring to the jewelry-store shooting incident that
resulted in injuries to innocent bystanders (and provided the basis
for Count 2 of the indictment in this case).
Neither
threatening

completely

violence

if

no

excusing
payment

a
is

debt
made,

or

claim,

can

fairly

nor
be

characterized by itself as assenting to the deferral of the payment

of what is owed.

And thus, on these facts, it would be "overly

speculative" for a jury to conclude that, in making clear the dire

consequences that would befall Loukas if he was lying about what
had happened to the pills, Madarati was actually agreeing to give
Loukas more time to pay the debt.

See Wallace, 59 F.3d at 339

("[N]one of the evidence presented at trial amounted to the

formation

of

credit

agreement,

because

Wallace

and

his

representatives never agreed to defer the collection of their

money.

After making their threats, they merely (and temporarily)

left Capri intact." (alterations and internal quotation marks

- 23 -

omitted)); United States v. Morillo, 158 F.3d 18, 22-23 (1st Cir.
1998) ("We must conduct a close review of the record and 'reject
those

evidentiary

interpretations

and

illations

that

are

unreasonable, insupportable, or overly speculative.'" (citation

omitted)).
That leaves only the time period between the parkinglot conversation and the actual use of extortionate means.

But

the record does not show that Madarati did anything during that
time period that would provide sufficient evidence for a jury to
find that Madarati was agreeing (even tacitly) to give Loukas more
time to pay.
The record shows that on March 31, the day after the two
men spoke in the convenience store parking lot, Madarati called
Loukas and repeatedly demanded his "shit," even telling Loukas he
would "see [him] today."

Moreover, in the only other conversation

between the two men reflected in the record, Madarati spoke to

Loukas in Loukas's driveway and made clear to Loukas that Madarati
"wanted his money or he wanted the pills."9

Thus, Madarati did

not in these interactions in any way suggest that Loukas had more
time to pay.

The record is not clear on exactly when that conversation

took place, but Loukas's testimony appears to indicate that it
occurred shortly after the March 31 phone conversation.

- 24 -

In arguing that Madarati nevertheless tacitly agreed to

defer the payment following the parking-lot conversation, the
government cites to a series of conversations between Madarati and
the third man charged in the conspiracy, Kabba, between April 1
and April 9.

In those conversations, the two men discussed ways

to intimidate Loukas and to induce him to pay.

The government

notes in particular an April 1 call between Kabba and Madarati

during which Madarati expressly chose not to go through with a
plan to frame Loukas by planting cocaine in his house and calling
the police.

And the government contended at oral argument that

the delay between that call and the ultimate execution by Madarati
and Kabba of another version of their plan -- which led to
Martinez's arrest near Loukas's house on April 10 -- provides a
sufficient evidentiary basis for a jury to find that Madarati
tacitly agreed to a deferral given the time that passed before
Madarati resorted to the use of extortionate means.
But

the

record

evidence

concerning

Madarati's

conversations with Kabba between April 1 and April 9 is not

sufficient to support a finding beyond a reasonable doubt that
Madarati was, despite his demands for immediate payment, actually
agreeing to allow Loukas to take more time to pay.

In plotting

how best to effect the collection of what he was owed and what he
had demanded be paid, Madarati did not at any point withdraw his
earlier,

clearly

stated

demand

for

- 25 -

immediate

payment,

which

followed right on the heels of the parking-lot threat.

Indeed,

during each conversation between Madarati and Loukas in the period

in question, Madarati demanded immediate payment from Loukas.
To be sure, as the government emphasizes, Madarati did
delay the use of extortionate means to collect payment for a number
of days.

But it is the use of extortionate means to collect "an

extension of credit" -- and not their use to collect a debt -that the statute prohibits.

See Boulahanis, 677 F.2d at 590.

And

thus evidence of a delay in using extortionate means to collect a

debt for which a demand for immediate payment has been made does
not itself suffice to show that credit has been extended.

See

Wallace, 59 F.3d at 339.10

For these reasons, this case is not just like Hoyle, 237
F.3d at 6, even though the government, like the District Court,
relies on that precedent to support the conviction.

In that case,

an electrician had provided electrical contracting services to

multiple customers without a written contract and without then
demanding "immediate payment."

Id.

Some months later, the

indictment charged, the electrician used extortionate means to

collect on the services.

Id.

10

We note that the government, in its opening statement and

closing argument below, consistently characterized Martinez as a
"debt collector" or a "debt collection subcontractor" and as having
"enter[ed] a conspiracy to collect a debt by use of extortionate
means." At no point in the trial did it argue to the jury that
Madarati agreed to defer repayment of Loukas's debt to him.

- 26 -

In

sustaining

conviction

under

894

against

sufficiency-of-the-evidence challenge, we held that on the record

in that case it was "logical to infer, at the very least, that
there was a tacit agreement to defer repayment of the debt" there
at issue.

Id.

And in explaining that "[o]nce the services were

provided and immediate payment was not demanded, an extension of

credit

was

established,"

we

noted

that

it

would

have

been

unreasonable for the beneficiaries of the services to have assumed

that the services were provided at no cost or that a bill would
not be forthcoming in "due course."

Id.

But while in Hoyle the agreement to defer payment could

be "logical[ly]" inferred from the electrician's silence upon
providing the services, id., no similar logical inference can be
drawn from Madarati's actions (or inaction). The electrician chose
not to present a bill within any expected time frame.

Id.

Madarati, by contrast, was not silent upon Loukas's return to

Boston.

Instead, Madarati threatened him during their first

meeting and then made two explicit demands for payment in the only
two conversations that the record shows they had thereafter.

And

while Madarati took a little more than a week to make good on his
threat,

he

did

nothing

in

between

that

could

reasonably

be

understood as a withdrawal of the threat-backed demand for payment

he had just made.

- 27 -

The District Court did also note that this case was
"arguably" similar to Hoyle for the separate reason that "it would
have been unreasonable for Loukas to assume that Madarati was
paying him (and providing resources) for services that would not
be performed." On that reasoning, the deferral of payment occurred
at the very outset of the transaction, when Madarati first gave
his money to Loukas, as Madarati would receive the pills (or the
money he had handed over) only later.
But, as we have explained, the government affirmatively
represented at oral argument that it was not contending that "the
deferral occurred at the time that Loukas took off to California
with the money," and the government instead has urged us to find
an extension of credit on the basis of the evidence of Madarati's
words and actions in the time period after Loukas returned to
Boston.

Consistent

with

the

government's

view

of

when

any

"deferral" could have occurred, the record shows that, in providing

the money to Loukas to buy pills on his behalf, Madarati was
providing the funds necessary for Loukas to carry out a task which
gave rise to a debt.

The record provides insufficient evidence

that Madarati was at that time assenting to the deferral of its

repayment. Thus, on these facts, we agree with the government's
concession that there was no assent by Madarati to defer a deadline
for re-payment -- and thus no "extension of credit" -- prior to
Loukas's return from California.

- 28 -

D.
Congress has made clear that 894 is to be construed
broadly.

H.R. Rep. No. 1397, at 31 (1968) (Conf. Rep.) ("[T]he

conferees wish to leave no doubt of the congressional intention

that chapter 42 is a weapon to be used with vigor and imagination
against every activity of organized crime that falls within its
terms.").

And an agreement to defer payment need not be express

or even bilateral.
F.2d

at

720).

See Hoyle, 237 F.3d at 6 (citing Sedlak, 720

Thus,

on

some

facts,

creditor's

delay

in

collecting a prior demand for payment might suffice to show an

agreement to defer payment.

But, consistent with Hoyle and the

plain text of 891(a), the record in each instance must show

"sufficient

indicia

of

agreement

to

conclude

that

an

agreement to defer payment of the debts existed" in order for there

to be sufficient evidence to sustain that element of the crime.
See Hoyle, 237 F.3d at 7.

And here, the record reveals only that

Madarati threatened harm to Loukas if he failed to pay what he

owed and then quickly followed up that threat by twice demanding
immediate payment while he finalized his preferred method of using
extortionate means to collect on the debt.

We therefore cannot

conclude that the record supplies sufficient indicia that Madarati

agreed to defer payment at any point, and thus we must reverse

- 29 -

Martinez's conviction as to Count 3 due to a lack of sufficient

evidence of any underlying "extension of credit."11
IV.
For

the

reasons

set

forth

above,

we

reverse

the

conviction of Ronald Martinez as to Count 3 and affirm in all other

respects.

11

The remaining published precedents on which the government

relies do not provide support for finding sufficient evidence of
an extension of credit on the record in this case.
In United
States v. Garcia, 135 F.3d 951, 954 (5th Cir. 1998), the creditors
"manifest[ed] an assent to defer payment" by permitting the debtor
to pay for a portion of his purchase (of marijuana) and "allow[ing]
him to pay for the balance at a later date," which was consistent
with a prior course of dealing. There is no similar evidence in
the record here. In Bonanno, 467 F.2d at 15, the creditor demanded
that "at least $2,500" of a $5,000 debt "had to be repaid
immediately" and allowed the debtor additional time to pay the
balance. Here, there was no such express agreement. In United
States v. Charles, No. 92-3513, 1993 WL 299361, at *3 (7th Cir.
Aug. 3, 1993) (unpublished), the defendant challenged the
sufficiency of the evidence but not specifically whether the
government had proved an "extension of credit."
And in United
States v. Neal, 692 F.2d 1296, 1301-03, 1308 (10th Cir. 1982), the
defendant raised a number of challenges relating to the sufficiency
of both the indictment and the trial evidence, but the court did
not specifically address the evidence sufficient to prove an
"extension of credit."
The government does also cite to an
unpublished case from the Tenth Circuit, United States v. Enriquez,
No. 96-6185, 1997 WL 31567, at *2 (10th Cir. Jan. 28, 1997)
(unpublished), which upheld a conviction because the "defendant
several times set deadlines for payment which he later postponed."
But that opinion does not describe what evidence was in the record
that led it to conclude that "deadlines" had been "postponed."

- 30 -